Spain Proposes 100% Property Tax for Non-EU Buyers Amid Housing Crisis

Spain has announced plans to impose a groundbreaking tax of up to 100% on the value of properties purchased by non-residents from outside the European Union, including the UK. 

The measure, described as “unprecedented” by Prime Minister Pedro Sánchez, is aimed at addressing the country’s deepening housing affordability crisis.  

Speaking at an economic forum in Madrid, Sánchez argued that the policy was necessary to combat the growing disparity between wealthy property owners and struggling tenants. “The West faces a decisive challenge: To not become a society divided into two classes, the rich landlords and poor tenants,” he said.  

Sánchez revealed that in 2023 alone, non-EU residents purchased 27,000 properties in Spain, largely for investment purposes rather than residency. “In the context of the housing shortage that we are in, [we] obviously cannot allow this,” he stated, emphasizing that the government’s priority is to make homes available for Spanish residents.  

The prime minister’s office explained that the proposed tax aligns with policies in countries like Denmark and Canada, where similar measures restrict non-resident property purchases. While specific details and timelines for parliamentary approval remain unclear, the proposal is expected to undergo further study before implementation.  

The announcement has already sparked concern among prospective property buyers from the UK. Michele Hayes, a retiree from Manchester who had been searching for a home near Alicante, said the proposal gave her pause.  

“We could look at buying quickly before the tax comes in, but we don’t know what could happen in the future,” Hayes said. “Selling could be tough if we can no longer sell to non-residents, especially a holiday home property in a touristy area.”  

Similarly, Martin Craven from London said the uncertainty surrounding the proposal had made him reconsider. “I definitely wouldn’t consider trying to get in before this tax because who knows what else they could do — a retrospective tax or a tax on existing owners. I’ll be looking at Cyprus now instead.”  

Others, like Julian Hunt from Surrey, expressed frustration, arguing that the policy ignores the economic benefits brought by non-resident buyers. “I would want to be out there four to six months a year, spending money, buying food and drink, paying taxes,” Hunt said. “This policy is losing sight of those of us who want to contribute to the local economy.”  

The tax proposal is part of a broader housing reform package announced by Sánchez on Monday. Other initiatives include:  Tax breaks for landlords who provide affordable housing, Transferring 3,000+ homes to a newly established public housing body, Increased regulation of tourist flats and higher taxes on short-term rentals.  

“It isn’t fair that those who have three, four, or five apartments as short-term rentals pay less tax than hotels,” Sánchez said, defending the push to tighten restrictions on tourist accommodations.  

While the measures have drawn criticism from international buyers, Sánchez maintains they are essential to prioritize housing for residents amid a growing affordability crisis. However, with his coalition government often struggling to pass major legislation, the success of the proposed tax remains uncertain.  

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